Annual household bills have soared more than £550 in the past three years - increasing three and a half times faster than inflation over the same period, according to new figures.

An increase in energy bills is the largest contributor to the hefty hike in costs, rising an average of £417 since 2015, to their current level of £1,706 in 2018, research by comparison website, Compare the Market, revealed.

It analysed the average cost of energy, home and motor insurance and found a substantial rise in the cost of bills for households across the UK.

The rise in energy costs have been the largest contributor to the increase in household bills

It discovered that people paid, on average, £2,590 for the three over the course of 2018 - a huge rise from the average cost of £2,032 in 2015.

The figures confirm the financial pressure that households are under, as the cost of living continues to rise - and it doesn't include other increasing monthly outgoings including council tax, water and other extras such as broadband and television packages.

Energy bills are currently at their highest rates due to the Big Six - who account for around 70 per cent of the energy market - routinely hiking their prices over the past couple of years, with each of the six raising their prices at least once.

In response to the rise in prices, many customers have decided to switch to smaller, challenger providers, in a bid to cut down on costs.

However, they too have also increased prices and a number of small energy suppliers have even ceased trading, with the latest being Economy Energy who announced earlier this week that it had gone bust.

Motor insurance is another rising cost for households, forced up by increases to Insurance Premium Tax and changes to the Ogden Discount Rate.

THE PRICE OF HOUSEHOLDS BILLS OVER PAST FOUR YEARS

2018

2017

2016

2015

Energy

£1,706

£1,625

£1,394

£1,289

Motor insurance

£724

£738

£693

£611

Home insurance

£160

£142

£135

£132

Total

£2,590

£2,505

£2,222

£2,032

Source: Compare the Market

The average car insurance policy will now cost motorists £724, compared to £611 in 2015 - a huge 18.5 per cent increase. However, it has seen a year-on-year decrease, from £738 in 2017.

Home insurance has also risen by 21 per cent since 2015, rising from £132 to £160 last year.

When divided up by region, Londoners pay substantially more for their annual bills, at an average of £2,981 – almost £400 above the national average.

The second most expensive region is the North West, with average household bills adding up to £2,835 in 2018.

By comparison, the North East is the cheapest region to live in, where households pay on average £2,368 annually on bills.

It is closely followed by the South West, who spent an average of £2,382.90 last year.

COST OF HOUSEHOLD BILLS BY REGION

Region Name

Energy

Home

Car

Total

East Anglia

£1,819.61

£167.39

£675.37

£2,662.37

East Midlands

£1,682.28

£153.26

£680.90

£2,516.44

Greater London

£1,674.21

£208.17

£1,099.20

£2,981.59

North East

£1,566.15

£134.99

£667.81

£2,368.94

North West

£1,844.97

£154.39

£836.15

£2,835.51

Scotland

£1,741.77

£157.20

£578.35

£2,477.31

South East

£1,850.01

£170.48

£651.06

£2,671.54

South West

£1,677.27

£150.15

£555.49

£2,382.90

Wales

£1,601.00

£152.56

£633.76

£2,387.31

West Midlands

£1,727.74

£148.50

£822.03

£2,698.27

Yorkshire And The Humber

£1,585.58

£158.20

£763.56

£2,507.34

Source: Compare the Market

Simon McCulloch, director at Compare the Market said: 'The cost of the living crisis has been well publicised over the past few years and these statistics further add to the weight of evidence that households are under unprecedented pressure in managing their finances.

'Hikes to bills have come from all directions in recent years with multiple increases in Insurance Premium Tax driving up insurance premiums (including car and home insurance), and the Big Six's relentless energy price hikes forcing loyal customers to pay ever more for a basic living requirement.

'The research highlights just how important it is for people to be aware that, when it comes to your bills, loyalty does not pay.

'Customers who don't shop around are paying the price associated with inertia.

'However, taking action and switching to cheaper deals could result in hundreds of pounds of savings every year.'

HOW TO BEAT SOARING BILLS

Energy: If you don't already have one, installing a thermostat could help you save hundreds on your heating. It will allow you to accurately set the temperature and will only heat the parts of your house that need it.

Choosing energy efficient appliances, such as fridges, tumble driers and dishwashers, can also make a huge difference.

These items should have an EU energy-efficiency rating from A to G with A symbolising the most energy efficient item and G indicating the least energy efficient.

Also, check and switch to the cheapest provider, using our comparison tool.

Car Insurance: One way to ensure that you aren't paying over the odds for your motor insurance is to make sure that only people who use the car regularly are named on the policy.

Securing your car can also help attract a discount. Install a car alarm, immobiliser and tracking device to your car and make sure you declare it to save money.

Make sure you look after your no claims bonus. It may increase your premium by a few pounds but that is nothing compared to the potential loss of a 90 per cent discount on a premium of several hundred pounds.

Use our deal finder to see if you can drive down the cost of cover.

Home Insurance: Don't necessarily take out home insurance with your mortgage provider - shop around to see if another company can offer you a better deal.

Accurately value your items when taking out insurance. Take your time when making a list of your contents as this could help you in the event of anything being broken or stolen.

Paying annually may mean you have to fork out on a big lump sum but it is usually cheaper than paying monthly as insurers often add an additional fee on your premium